I think it's meant to save on bandwidth/resources by only showing the "speaking" video feeds.

It's somehow still using more bandwidth than Google Meet with the same number of video streams.

It's most likely still receiving all feeds in the background though.

You may be right. I don’t know how it works. I’ve noticed that when a new video-enabled user shows up on the screen, there is a delay between the user profile showing and the video overlay presenting itself, so I was assuming that was where a stream was being started for that video feed.

Yes, although I'm not sure if the hidden streams use bandwidth. Also, to the best of my knowledge, Teams handles individual streams usually, while meet usually muxes them to save bandwidth. Zoom is easily the most efficient of the big four and I think uses a whole bunch of compression tricks.